FT Report8 Mar 2008 18:05
Shares in Renovo have slumped 70 per cent over the past six months, mostly on the back of this week's announcement that Juvista, the company's scar prevention - and potential blockbuster - drug had failed its latest trial. Britain's once largest biotechnology company had its value halved in the snap of a jaw. Renovo said the drug, developed from studies of wound-healing in alligator embryos, had failed trials to prevent scarring in breast augmentation surgery. Juvista has, however, worked when tested on other parts of the body. Seven Phase II trials have been successful. Many biotechnology analysts, familiar with the volatility of the sector, are sticking by the company. They believe the market overreacted and that Juvista's chance of making it should not yet be written off. Shire, the company's partner, is reviewing data and could still walk away but having paid the biotech company an upfront $75m (£37.6m) as well as a $50m equity investment at 200p a share, this seems unlikely. If anything, Shire is more likely to buy Renovo if it still has confidence in the business. The shares are cheap - closing at 55¼p on Friday - but remain only for the high-risk investor.
I got into this on the back off the huge drop. Am hoping for a recovery, any thoughts?